Consumer Financial Wellness Portal

We hear so often of people who get into trouble because
they cannot pay their debt to shops that have granted
them credit and banks that have lent them money.
What is often forgotten is that many people borrow
money and do not get into any financial difficulties!
The main reason for this is that they only borrow what
they can afford to pay back. In other words, they
manage their credit well.
Some of the reasons for many of us getting into financial
difficulty include:

• buying on the spur of the moment
• buying things to impress others
• not setting some money aside for emergencies
• lack of planning and budgeting

Let us have a look at some of these reasons:

Buying Things To Impress Others

The new cellphone, furniture, car or even house – are
they because we really need them or is it to stay trendy
and keep up with the neighbours? So often we get into
financial difficulty and waste a lot of money buying
things to impress others, rather than because we really
need them! We are also very good at convincing
ourselves that we need these things, even when we do
not really have to have them. Again, before buying
expensive items, ask yourself the following:

• Do I really need this? and if yes, do I need it right now?
• Can I afford this?
• Is there something else that I should be spending this money on?

The best thing to do when you are tempted to buy on
the spur of the moment (also called unplanned spending)
is to give yourself a day or two to think about
whether to buy the item or not. In many cases, you will
probably decide that you do not need it after all!

Not Setting Money Aside for Emergencies

Car repairs, visits to doctors and hospitals, replacing
stolen goods and funerals all cost money and it is important
to set some money aside each month for these emergencies.
Even if one is insured, it often takes some time
before you are paid out by the insurance company and
if you do not have money available immediately, you
could be faced with short-term financial difficulties.

How Much To set Aside:
Different advisors give different advice. A general rule
though, is to set aside three months salary for emergencies.
Suggestion:
Open a 32 day call account at a bank and make
arrangements for a debit order that you can
afford each month (normally a minimum of R200 is
required by banks).
Contribute to this fund until you have enough in it
to cover three months salary/income. You will be
surprised at how quickly the account grows. You
may think of carrying on with this idea for a much
longer period – you can always take out some of
the extra money and invest it where it will earn
even more interest .